Madoff Trustee Reaches a $1 Billion Deal with Tremont Group

Irving Picard, the well know tenacious liquidator of the Bernard Madoff firm, has announced a $1 billion settlement with over a dozen funds that are associated with the hedge fund firm of Tremont Group Holdings, Incorporated, according to Bloomberg. According to the deal, the $1 billion payment from Tremont who was the second largest so called feeder into Madoff’s mega fraud, will add to the already collected $2.6 billion in the fund for victimized customers. Mr. Picard had sued Tremont for $2.1 billion, alleging that they ignored warning signs that Madoff could be running a Ponzi scheme and profited from it.

Among the parties to the deal, was Oppenheimer Acquisition Corporation, an affiliate of the Oppenheimer mutual funds that bought out Tremont, and Oppenheimer’s parent companies, MassMutual Holdings LLC and Massachusetts Mutual Life Insurance Company, according to Picard’s office. Included in the deal, Tremont funds will be allowed to make claims on the Madoff estate of nearly $3 billion. A spokesman for the hedge fund firm, Montieth Illingworth, said that deal allowing Tremont to make nearly $3 billion in claims will allow its investors to get back a portion of their losses resulting from the fraud.

This is the latest settlement, following a couple of deals completed in May 2011 with funds associated with the Fairfield Greenwich Group, by far the largest feeder fund in Madoff’s Ponzi scheme. In that deal, the funds reduced their claims from Madoff’s estate in return for Trustee Picard dropping his efforts to collect $4 billion in transfers.

Picard has collected over $8.6 billion, or nearly half of the $17.3 billion in principal lost by Madoff victims, with the largest settlement being $5 billion deal with the Jeffry Picower Estate.